Question: Draw the indifference curve in the expected returnstandard deviation plane corresponding to a utility level of .05 for an investor with a risk aversion coefficient
Draw the indifference curve in the expected returnstandard deviation plane corresponding to a utility level of .05 for an investor with a risk aversion coefficient of 3. (Hint: Choose several possible standard deviations, ranging from 0 to .25, and find the expected rates of return providing a utility level of .05. Then plot the expected returnstandard deviation points so derived.)
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